China Sky Chemical Fibre - Reasons for trading

China Sky requested for a trading halt this morning. It is believe that the trading halt was requested for the following reasons:

a) Major shareholder Mr Cheung Wing Lin was forced to sell his pledged shares to meet obligations; and

b) A profit warning stating that the company has incurred a loss for 1Q09 is to be released.

The major shareholder is in talks with the share pledge counterpart to decide on the amount to sell; thus it may take a few more days for trading to resume. We believe there would be strong selling pressure on the stock once trading resumes

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